What it measures
ATR averages the true range of the last N candles — the largest of high minus low, or the gaps from the previous close. It does not show direction; it shows how much an asset typically moves, which helps you pick assets and expiries.
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Starting settings by expiry
| Expiry | Settings | Signal |
|---|---|---|
| any | ATR 14 on the candle size you trade | Context, not entries |
Starting points for testing on a demo account, not proven profitable settings.
How traders use it
- Compare assets: avoid very low ATR when you need movement to clear a strike.
- Rising ATR after a quiet period often means news or a breakout.
- Skip trades when ATR spikes far above normal — moves become random.
Where it fails
- ATR has no direction.
- Values are in price units, so they are not comparable across assets without scaling.
Works well with
- Bollinger Bands — Volatility bands around a moving average.
FAQ
Does ATR give buy or sell signals?
No. It measures volatility and is used to choose when and what to trade.
ExpiryLab Editorial Research desk We open broker accounts from our target countries, test deposits and withdrawals, and log what we measure.
How this page was made: drafted with AI assistance from public sources and our own test logs, then checked and edited by the ExpiryLab editorial team. The date above shows the last check. How we test · Editorial policy